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The 

Pennsylvania  Tunnel 
Franchise. 


Some  of  the  Reasons  Why  It 
Should  Be  Granted;  Stated 
by  The  Merchants’  Association 
of  New  York  at  the  Hearing 
Before  the  Railroad  Committee 
of  the  Board  of  Aldermen, 
November  26,  1902. 


Digitized  by  the  Internet  Archive 
in  2017  with  funding  from 

University  of  Illinois  Urbana-Champaign  Alternates 


https://archive.org/details/pennsylvaniatunnOOmerc 


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Mr.  Chairman  and  Members  of  the  Committee  on  Railroads: 

HE  committee  representing  The  Merchants’ 
Association  of  New  York  appears  before  you 
urging  the  approval  by  your  committee  and 
the  Board  of  Aldermen  of  the  Pennsylvania 
tunnel  franchise  as  now  before  you  and  as  recommended  by 
your  special  committee  in  its  report  dated  November  18th. 

As  a  result  of  the  close  scrutiny  which  the  Board  of 
Aldermen  has  given  to  this  subject,  a  number  of  impor¬ 
tant  amendments  have  been  incorporated  in  the  franchise 
which  unquestionably  will  prove  of  great  benefit  to  the  city 
and  to  its  taxpayers.  Of  the  alterations  in  the  franchise 
suggested  by  the  Board  of  Aldermen  through  its  committee 
which  were  not  adopted,  the  one  most  in  controversy  is  that 
there  should  be  embodied  in  the  franchise  a  condition  that 
but  eight  hours  of  work  a  day  for  laborers  engaged  in  con¬ 
structing  the  tunnel  should  be  required.  The  Pennsylvania 
Railroad  Company  has  positively  stated  that  upon  the  inser¬ 
tion  of  such  a  condition  as  that  it  would  be  compelled  to 
give  up  the  proposed  improvement. 

We  earnestly  protest  against  the  insistence  upon  this 
provision,  for  the  following  reasons. 

1 :  Because  it  would  defeat  this  great  benefit  to  the 
city,  voluntarily  offered  not  only  without  expense 


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to  the  city,  but  with  provisions  for  compensation 
to  the  city. 

2 :  Because  the  best  legal  opinion  is  to  the  effect  that 
under  the  decisions  of  our  highest  court  such  a 
provision  would  be  of  doubtful  constitutionality. 

3 :  Because,  even  if  constitutional,  such  provision  would 
be  non-enforcible  on  the  part  of  the  city,  for  the 
reason  that  the  city  as  a  corporation  would  suffer 
no  damage  from  a  breach  of  such  contract. 

4:  Because,  even  if  constitutional  and  enforcible,  it 
would  still  be  a  dangerous  precedent  for  a  munici¬ 
pality  or  any  franchise-granting  power  to  attempt 
to  dictate  as  to  the  terms  of  private  contracts  be¬ 
tween  employer  and  employee,  to  which  private 
contracts  the  franchise-granting  power  can  in  no 
sense  be  a  party. 

5  :  Because  the  establishment  of  such  a  precedent  would 
act  as  a  powerful  retarding  influence  upon  capital 
which  otherwise  would  seek  investment  here  in  the 
development  of  large  constructive  improvements. 

6 :  Because  the  defeat  of  this  improvement,  incurred 
by  the  insistence  upon  such  provision,  would  stop  the 
expenditure  of  some  $50,000,000,  the  bulk  of  which 
would  of  necessity  be  distributed  in  the  form  of 
wages  to  the  citizens  of  Greater  New  York. 

7  :  Because  the  failure  of  this  improvement  would  result 
in  a  direct  financial  loss  to  the  City  of  New  York 


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of  revenue  derived  both  from  the  franchise  itself 
and  also  the  increased  value  of  taxable  property  in 
the  city. 

8 :  Because  the  failure  of  this  improvement  would  be 
against  the  best  interests  of  our  wage-earning 
citizens,  in  that  it  would  prevent  continuous  em¬ 
ployment,  at  good  wages,  of  a  large  body  of  citizens 
and  would  prevent  the  opening  up  and  rapid  devel¬ 
opment  of  outlying  sections  of  our  city  and  locali¬ 
ties  contiguous  thereto  where  cheap  homes  could 
be  obtained. 

9 :  Because  the  defeat  of  this  improvement  would  not 
only  seriously  retard  the  growth  and  development 
of  the  commercial  interests  of  our  city,  but  would 
make  it  even  more  difficult  to  maintain  its  present 
position  in  competition  with  other  trade  centers  of 
the  country. 

The  City  of  New  York  has  a  population  of  about  4,000,- 
000,  with  a  suburban  population,  living  in  the  immediate 
vicinity  and  doing  business  in  and  dependent  upon  New 
York,  of  almost  3,000,000  more,  making  a  total  of  about 
7,000,000  people  who  will  be  affected  beneficially  by  the  con¬ 
struction  of  the  proposed  terminal  facilities  under  the  fran¬ 
chise  now  before  you.  Of  this  7,000,000  not  more  than 
100,000  belong  to  the  organizations  which  are  insisting  upon 
the  insertion  of  this  eight-hour  labor  clause. 

We  respectfully  submit,  is  it  right,  is  it  just,  that  a  benefit 


to  such  a  vast  majority  should  be  defeated  in  the  alleged 
interests  of  such  a  tremendously  small  minority?  The  con¬ 
trast  is  still  more  striking  when  it  is  realized  that  of  this 
small  minority  of  100,000,  not  more  than  4,000  or  5,000 
can  receive  employment  in  prosecution  of  the  proposed  work. 

To  insist  upon  this  condition  in  the  franchise,  in  view  of 
the  absolute  declination  upon  the  part  of  the  company  to 
accept  the  franchise  with  such  a  condition  attached,  would 
be  of  no  benefit  even  to  this  small  minority,  because  there 
would  be  no  employment  of  labor.  If,  on  the  other  hand, 
the  franchise  is  granted  without  the  clause  objected  to,  then 
the  project  will  go  forward.  The  labor  organizations  could 
then  properly  and  effectively  negotiate  with  the  constructing 
company  as  to  the  terms  and  conditions  under  which  the 
labor  should  be  employed.  Behind  all  such  negotiations 
would  stand  the  powerful  force  of  public  opinion.  If  the 
conditions  urged  by  labor  organizations  be  just,  then  public 
opinion  would  compel  the  acceptance  by  the  constructing 
company  of  such  demands.  Moreover,  the  very  nature  of 
the  work  itself  and  the  history  of  the  Pennsylvania  Rail¬ 
road  Company  in  its  dealings  with  its  employees  in  the  past 
both  stand  as  guarantees  that  the  employment  of  labor  would 
be  upon  terms  fair  and  just  under  the  physical  conditions 
existing. 

The  city  has  never  hitherto  exacted  from  any  corpora¬ 
tion  to  which  it  has  granted  a  franchise  compensation  bear¬ 
ing  any  fair  proportion  to  the  value  of  such  franchise,  except 


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in  the  recent  case  of  the  Rapid  Transit  underground  road. 
Now  the  Pennsylvania  Railroad  Company  voluntarily  offers 
to  do  for  this  city,  without  cost,  that  which  the  city  urgently 
needs — namely,  to  build  at  its  own  expense  a  great  terminal 
system  giving  access  to  New  Jersey  and  Long  Island,  and 
has  offered  to  pay  for  the  privilege  of  conferring  this  benefit 
upon  the  city  about  forty  times  the  rate  hitherto  paid  for 
similar  franchises. 

It  is  demanded  of  you  that  you  shall  so  use  your  public 
powers  as  to  interfere  with  the  free  right  of  contract  between 
employer  and  employee.  The  Board  of  Aldermen  has  no 
constitutional  power  to  regulate  private  relations.  Its  duty 
is  to  consider  the  public  interests,  and  the  public  interests 
only.  On  the  one  hand,  is  a  great  public  improvement 
of  most  pressing  necessity  and  of  great  value  to  the  whole 
body  of  the  people.  On  the  other  hand,  is  a  demand  made  upon 
you  that  your  proper  powers  be  so  abused  as  to  attempt  to 
bring  about  an  interference  in  private  relations  for  the  tem¬ 
porary  benefit  of  possibly  5,000  men,  with  the  certainty  that 
if  that  demand  is  granted  the  tunnel  will  not  be  built  and  the 
individual  and  commercial  interests  of  six  or  seven  million 
people  will  suffer  greatly. 

The  interests  of  these  5,000  people  are  strictly  local, 
while  the  commercial  interests  of  the  city  are  both  local 
and  national.  The  commercial  interests  are  dependent 
not  only  for  their  further  development  but  for  their 
present  maintenance  upon  the  development  of  every 


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public  improvement  which  will  aid  in  giving  to  those 
commercial  interests  every  proper  advantage  in  competition 
with  other  trade  centers.  The  interests  of  even  the  5,000 
workmen  are  dependent  upon  the  prosperity  and  develop¬ 
ment  of  the  commercial  interests,  which  give  employment  to 
probably  90  per  cent,  of  our  people. 

The  commercial  industries  of  New  York  are  constantly 
endeavoring  to  build  up  the  manufacturing  and  trade  of 
the  city,  upon  the  prosperity  of  which  the  citizens  are  depend¬ 
ent,  and  to  that  end  they  seek  to  obtain  the  necessary  public 
improvements  and  constantly  keep  an  army  of  commercial 
men  of  over  fifty  thousand  traveling  throughout  the  whole 
country,  to  whom  are  paid  annually  salaries  ranging  from 
$1,000  to  $10,000,  with  expenses.  What  for?  To  keep  New 
York  before  the  country  and  world  at  large  as  the  greatest 
business  center,  and  to  fight  its  commercial  battles  with  other 
trade  centers  who  are  constantly  trying  to  make  incursions 
into  our  trade. 

We  believe  in  labor  organizations.  We  believe  that  when 
properly  organized  and  conducted  upon  a  just  basis  they 
have  the  confidence  of  our  entire  citizenship,  but  when  they 
step  beyond  the  proper  sphere  of  self-protection  and  attempt 
to  claim  for  themselves  rights  and  privileges  which  interfere 
with  the  proper  rights  and  privileges  of  other  interests  in  our 
community,  when  they  attempt  to  dictate  to  the  vast  pro¬ 
portion  of  our  people  for  their  own  unjust  advancement,  when 
they  hold  up  the  red  light  of  danger  warning  capital  not 


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to  come  to  this  city  for  investment  and  thus  retard  the 
growth  and  prosperity  of  the  city,  then  they  become  unjust 
and  detrimental  to  the  prosperity  not  only  of  the. city,  State 
and  nation,  but  of  themselves. 

We  believe  in  justice  to,  and  fair  treatment  of,  labor,  but 
we  also  believe  in  the  same  measure  of  justice  to  and  fair 
treatment  of  the  interests  of  the  vast  majority  of  our  citizen¬ 
ship  and  of  capital.  We  are  not  opposing  the  proposition  of 
an  eight-hour  day  for  labor,  but  we  are  maintaining  that  this 
is  not  the  proper  forum,  nor  is  the  method  now  sought  to  be 
employed  the  proper  method  for  consideration  of  that  sub¬ 
ject. 

The  brains,  the  capital  and  the  labor  of  our  community, 
working  together,  have  already  secured  for  the  development 
of  our  city  the  advantage  of  the  widening  and  deepening  of 
the  channels  leading  into  this  harbor,  which  will  insure  to  our 
city  the  control  of  the  export  and  import  trade  of  the  United 
States.  They  have  also  fought  for  years  to  obtain  an  ade¬ 
quate  improvement  of  the  Erie  Canal,  which  would  open  a 
line  of  transportation  of  small  resistance  from  New  York 
to  the  Great  Lakes  and  the  West.  Their  efforts  in  this 
direction  now  bid  fair  to  be  crowned  with  immediate  success. 

As  a  link  necessary  to  supplement  these  two  great  im¬ 
provements,  comes  a  third — namely,  the  proposition  of  the 
Pennsylvania  Railroad  Company  to  develop  this  magnificent 
terminal  in  this  city  at  an  expense  to  them  of  some  $50,000,- 
000.  This  third  and  necessary  improvement  is  now  within 


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our  grasp,  provided  the  franchise  is  granted  without  undue 
obstructive  conditions.  Such  an  obstructive  condition  is  the 
proposed  eight-hour  labor  clause.  If  this  clause  is  inserted  it 
means  the  beginning  of  an  additional  diversion  from  this  city 
of  commercial,  financial  and  manufacturing  industries.  The 
disastrous  results  of  such  a  movement  would  fall  upon  the 
city  in  its  entirety,  but  would  bear  with  special  stress  upon 
the  wage-earning  interests,  the  constancy  of  whose  employ¬ 
ment  and  the  rate  of  whose  wages  depend  absolutely  upon 
the  prosperity  and  development  of  the  trade  and  commerce 
of  our  port. 

The  responsibility  for  such  a  result  now  rests  solely 
upon  the  Board  of  Aldermen  of  the  City  of  New  York.  It 
is  to  call  attention  to  this  responsibility,  thus  resting  upon 
the  body  of  which  your  committee  is  a  part,  that  the  delega¬ 
tion  of  The  Merchants’  Association  of  New  York  is  present¬ 
ing  this  matter  before  you  at  this  time,  believing  as  we  do 
that  an  improvement  of  such  magnitude  and  of  such  vast 
importance  to  the  whole  municipality  will  be  insured  by 
favorable  action  on  the  part  of  your  committee  and  by  the 
Board  of  Aldermen. 

Respectfully  submitted, 

William  F.  King,  Chairman; 
Henry  R.  Towne, 

George  L.  Duval, 

John  C.  Eames, 

S.  C.  Mead,  Secretary.  Committee. 

New  York,  Nov.  26,  1902. 


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3  0112  061414162 


ECONOMIST  PRESS,  NEW  YORK. 


